Registration

Registration confirms that the small business qualifies as an EBC under section 28.2, and as an eligible investment pursuant to section 10 of the Small Business Venture Capital Act. It also confirms that the description of the business operations meet the prescribed activity requirements under regulation 11.

The EBC must be a corporation incorporated under B.C.'s Business Corporations Act, or Canada's Business Corporations Act, or be incorporated in another province and registered to carry on business in B.C.

Activity

The EBC must be substantially engaged in B.C. in one or more of the 6 qualifying activities:

Manufacturing or processing, including services directly associated with the export of value-added goods produced in British Columbia

Destination Tourism Resort

Research and development of proprietary technology

Development of interactive digital new media product

Community diversification outside of the Lower Mainland and the Capital Region

Clean Technology

Annual Employment

The EBC, together with any affiliates, cannot have more than 100 employees at the time of an initial investment by an investor under the program.

If the EBC's employment grows beyond 100 employees the EBC may raise additional equity capital from the same VCC or EBC investors.

Wages and Salaries

The EBC must pay at least 75% of its wages and salaries to employees who regularly report to work at operations located in B.C.

The 75% threshold drops to 50% for EBCs primarily engaged in the export of goods or services outside B.C.

B.C. Presence

The EBC must maintain a permanent establishment in B.C.

Permanent establishment means a place of business staffed by senior management who direct the EBC's operations, and can bind it contractually.

Assets

The EBC must maintain at least 80% of its assets in B.C.

Minimum Equity Capital

The EBC must have equity capital of at least $25,000 prior to registration (equity capital raised prior to registration is not eligible to receive tax credits).

Prohibited Uses of Capital

The funds invested in an EBC under the program must be used to finance its start-up, expansion or growth. An EBC must not use, directly or indirectly, any funds raised under the program for prohibited purposes, defined under section 11 (2) of the Small Business Venture Capital Act Regulation.

The EBC must maintain these eligibility requirements while it is registered in the program. Registration requirements end five years following the date of the EBC's most recent issue of shares for which tax credits were issued.

Failure to maintain these requirements may result in the EBC's registration in the program being suspended or revoked. Failure to correct the action that caused the suspension or revocation may result in the government demanding repayment of tax credits previously issued.